Course Type: Required/Concentration Optional
For: Third-year undergraduates majoring in Accounting, Financial Management, Business Management and Marketing
Class hours/Credits: 54 /3
Class Language: English/Chinese
Instructor: Zhang Jianping, Jiang Ping, Yu Shulian, Wang Xiuli, Zheng Jianming, Kong Ningning, Li Xiangzhi, Ren Guanhua, Zhao Yang.
Office: Rm. 708, Sincerity Hall
Work phone: 64493509, 64493506
Office Hours: 1:30—5:00 pm, Thursday, or by appointment only.
Textbook: R.Charles Moyer, James R.McGuigan and William J.Kretlow, CONTEMPORARY FINANCIAL MANAGEMENT, Seventh Edition by South-Western College Publishing, an ITP Company.
Reference Books:
1． Arthur J. Keown, J. William Petty, David F. Scott, Jr. and John D. Martin, Foundation of Finance, Second Edition, 1998 by Prentice-Hall, Inc.
2． Richard A. Brealey, Stewart C. Myers, Principles of Corporate Finance, Fifth Edition, 2001 by McGraw-Hill.
3． Stephen A. Ross, Randolph W. Westerfield, Jeffrey F. Jaffe, Corporate Finance, Fifth Edition, 1999 by McGraw-Hill.
4． Richard Pike, Bill Neale, Corporate Finance and Investment, Fourth Edition, 2003 by Prentice Hall.
5． W. Kester, etc, Case Problems in Finance, 1997 by McGraw-Hill.
6． 《公司理财精要》，斯蒂芬·罗斯等著，张建平译，人民邮电出版社，2003年1月
7． 《公司财务管理》蒋屏主编，对外经济贸易大学出版社，2001年
8． 《当代西方财务管理》，周首华、杨济华编著，东北财经大学出版社，1997年
9． 《公司财务管理》，道格拉斯·R·艾默瑞著，荆新等译，中国人民大学出版社，1999年
10．《现代财务管理基础》，Arthur J. Keown等著，朱武祥译，清华大学出版社，2000年
11．《财务管理分析》，罗伯特·希金斯著，沈艺峰等译，北京大学出版社，2004年
12．《公司财务战略》，卢斯·班得等著，人民邮电出版社，2003年
13．《财务管理案例教程》，陈勇等编著，北京大学出版社，2003年
Grading:
Students will be expected to do 4 to 5 problem sets and 3 to 4 quizzes. Homework assignments are due at the beginning of class following the class in which they are assigned, unless otherwise indicated. There will be a final exam and a project due at the end of the course. All students are divided into groups for taking the project. Class participation is expected and students will be called upon in class. Final grades are determined by the following formula:
Grade =0.10(homework) +0.10(quizzes) + 0.20(project) + 0.60(final)
Attendance & Class Participation
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Students are a major component of the learning process and will be expected to attend class.
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Excessive absence and tardiness will result in a lower course grade.
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NOTE: 1/3or more absences (cumulative) from class are considered excessive and not promised to take final exam. Course Overview
This course is organized into six major parts. Part I defines the finance function, examines the goals of the firm, considers the role of the financial manager, reviews the structure and functioning of the domestic and international financial marketplace. The basic concepts of shareholder wealth maximization, cash flow, and market efficiency are presented. Part II develops the theory of valuation, including a comprehensive treatment of time value of money concepts, the valuation of fixed income securities, and the valuation of equity securities. The role of investment bankers in the issuance of securities is discussed. Risk-return analysis concepts are presented. Part III presents the capital investment decision, emphasizing both the theoretical and the practical aspects of capital budgeting, including the role-played by real options in the capital budgeting process. Party IV deals with the cost of capital, the determinants of an optimal capital structure, and dividend policy. Party V considers working capital management decisions in the areas of cash, marketable securities, accounts receivable, inventories, and sources of short and intermediate-term financing. Party V also covers financial forecasting techniques. Party VI covers lease financing, financing with derivatives. Course Objectives
The main objective of the course is to introduce to the students some general aspects of the financial management environment, financial analysis, investment decision, etc. The skills to understand, analyze and solve problems are essential to the management of enterprises, so students are expected to be more aware of the problems, deepen their understanding of problems and issues, and improve their skills in solving numerous problems in corporate financial management. Schedule (18 Weeks, 3 hours per week)
PART I INTRODUCTION
Week 1-2 1. What is Finance?
2. Goals of the Firm
3. Agency Problem
4. Financial System
5. Market Efficiency Hypothesis
Required Reading: Chapter 1 and Chapter 2 (Not including Pg.47-52) PART II DETERMINANTS OF VALUATION
Week 3 1. The Time Value of Money
Required Reading: Chapter 4
Week4-5 2. Valuing Financial Securities
1) Bond
2) Preferred Stock
3) Common Stock
Required Reading: Chapter6 and Chapter 7
Week 6 3. Risk and Return
Required Reading: Chapter 5
PART III CAPITAL INVESTMENT DECISION
Week 7 1. The Cost of Capital
Required Reading: Chapter11
Week 8 2. Cash Flow Analysis
Required Reading: Chapter 8
Week9-10 3. Capital Budgeting Decision Criteria
4. Other Methods in Capital Budgeting
5. Capital Budgeting and Risk
6. The Optimal Capital Budgeting
Required Reading: Chapter 9, Chapter10 and Pg. 434-439
PART IV CAPITAL STRUCTURE AND DIVIDEND POLICY
Week 11 1. Breakeven Analysis
2. Operating Leverage and Business Risk
Week 12 3. Financial Leverage and Financial Risk
4.Combined Leverage
Required Reading: Appendix13A, Chapter 13
Week 13 5. The Capital Structure Theory
Required Reading: Chapter 12
Week 14 6. Dividend Policy
Required Reading: Chapter 14
PART V WORKING CAPITAL MANAGEMENT
Week 15 1. Financial Forecasting
2. Working Capital Policy
Required Reading: Chapter 15
Week 16 3. The Management of Cash Marketable Securities
4.Mangement of Accounts Receivable and Inventories
Required Reading: Chapter 16 and Chapter 17
PART VI ADVANCED TOPTICS
Week 17-18 1. Leases Financing
2. Financing With Derivatives
Required Reading: Chapter 19 and Chapter 20
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